Issue No. 257: Snap Inc. and eCommerce

Snapchat, Nike, Darkstore and Shopify teamed up to pre-release the Air Jordan III “Tinker” on Snapchat with same-day delivery. There are a few implications to consider here.

In the United States, eCommerce is dominated by consumer search. Product discovery still lags behind. While Amazon continues their efforts to insource a tried and true discovery mechanism that is currently outsourced to digital publishers (in exchange for affiliate revenue), the hole in the system remains. So, leave it to the embattled media company known for discovery to attempt the leap.

Perhaps Snapchat is attempting to lean into this role? There might just be a product market fit.

Snapchat’s push into eCommerce is a long time coming and it couldn’t happen at a more appropriate time for the Los Angeles media company ($SNAP). Here’s what Jason Del Rey noted about the the partnership between Shopify and Snapchat for Nike’s Jordan brand:

Over the All-Star weekend, Nike hosted a special concert in Los Angeles, the host city of the game. Attendees were guided to use the Snapchat camera to scan a code displayed on a basketball-hoop backboard to view the new Air Jordan III “Tinker” sneaker in the app.

Guests were then able to purchase the sneaker right within Snapchat with the help of technology from the e-commerce software company Shopify. And most of the kicks were delivered to customers on the same day, thanks to a logistics startup called Darkstore.

May 2016’s 2PM Issue No. 46 was entitled “Snapchat, the eCommerce Giant.” It was titled as such because it featured a now-noteworthy article by Maya Kossoff that preceded much of the conversation that you will read about Snapchat’s recent experiment with Shopify and the Jordan brand.

The ability to buy tickets without leaving Snapchat is the biggest coup for Snapchat and Twentieth Century Fox, which placed the ad buy, and it suggests the company is making serious moves toward expanding into the e-commerce space.

Snapchat’s potential to combine advertising campaigns with ease of purchase sets itself apart from Instagram who has yet to develop a partnership with Stripe or Shopify. I was excited about that direction before Snapchat focused on their Spectacles campaign. But even with Spectacles, Snapchat began honing the ideas that we’re now seeing.

The most successful marketing campaign that Snapchat has led in the last two years wasn’t through traditional advertising, it was through traditional retail and eCommerce. […] There is a virtuous cycle in modern digital media and eCommerce that shouldn’t be ignored. Consumers want to go where they are influenced to act. And advertisers would be smart to create content in those same spaces.

With Jordan, Snap is dipping its toe into the possibility of monetizing just about anything via app-integrated sales channels. Snap openly classifies itself a camera company, rather than a social media app. That’s why it’s explored products like Spectacles, which turned sunglasses into a video camera. And while right now, Snap is only selling one limited edition sneaker drop for Jordan through a live event, it’s easy to imagine Snap leveraging the close relationship that its 187 million daily active users have with its camera to any number of third-party brand partners.

Facebook has done a marvelous job of iterating around Snapchat’s original ideas, all but trouncing the high flying Snap, Inc. Only time will tell if this flavor of content x commerce is another one of those ideas that we’ll find reimagined for Instagram.